Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets! -- Ignore unavailable to you. Want to Upgrade?

To: Jess Beltz who wrote (5798)	6/11/1998 8:52:00 AM
From: Mason Barge	Respond to of 10921

The Asia slide continued last night. Tokyo stocks fell more than 2% Thursday and closed at a five-month low - most experts seem to attribute this to continued weakness in Japanese banking issues. The dollar hit an eight-year high against the yen -- a sign of continued concern over the health of the Japanese and other Asian economies. Most Asian stock markets dropped: Nikkei down 2%, Hong Kong stocks fell 1% to close at a three-year low, Philippine key index down 4.6%, Malaysia's index dropped 1.4% and Thailand's key index fell 2.8%. The WSJ reports that "Among decliners were banking issues, which investors dumped on renewed concerns about the bad loans saddling Japan's financial system. Investors are concerned that banks' problem loans overseas will swell because of the weakening yen, traders said. That weakness, which erodes the value of Japanese stocks held by foreign investors, also hurt sentiment." This is getting to be a vicious cycle. Currency traders said the dollar's advance was spurred by recent sharp falls in share prices in Japan and Taiwan, leading to safe-haven dollar-buying. On the other hand, declining share prices hurt the banks and further erode yen value. Especially important here was the apparent decision by the Group of Seven (which met in Paris yesterday) to let the yen fall and allow Japan to reap the harvest of its errors. The Philippine Stock Exchange Index closed down almost 5%. It seems that the big losers were largely economies that had not been hurt as much, to date. Indonesia and Korea were actually slightly up. The rise in Indonesia's market was due almost entirely to TLK, the big Indonesia telephone, which is at least is taking real steps to solve its own problems. Arbitrageurs were buying up shares in Indonesia, which were trading at a discount to TLK on foreign markets. Indonesia, at least in the telephone arena, has not shown the kind of xenophobic avoidance of foreign investment/control that typifies Japan and Korea, and has 5 parters (4 of the them Western) too fall back on. It has had to promise them a bigger chunk of profits, but has a source of Western capital with an equity stake to ensure adequate capitalization.